AI Workloads Trigger Historic DRAM and NAND Price Spikes
The global memory chip shortage has entered a new and more severe phase as artificial intelligence workloads devour available capacity. Contract prices for NAND flash chips have jumped more than 600% since September 2025, while DRAM contracts have climbed nearly 400%. Analysts attribute this DRAM price surge to an aggressive shift by memory makers toward high-bandwidth memory (HBM) and other AI-focused products, leaving less capacity for conventional PC and consumer electronics components. Strategists note that the AI demand supply chain shock is proving longer-lasting than many expected, with some observers warning that tight conditions could persist to 2030 or beyond. For memory manufacturers and investors, sky-high NAND flash prices and DRAM margins are a windfall. But for device makers and end users, the same trend is inflating PC component costs, compressing profit margins and reshaping upgrade cycles across the broader tech ecosystem.
AI Infrastructure Gets Priority as PCs Fight for Leftover Supply
A two-tier memory market is emerging as AI infrastructure builds receive preferential allocation of scarce DRAM and NAND. Startups and cloud providers training large models are purchasing vast volumes of memory, often locking in long-term contracts that crowd out traditional PC and gadget vendors. Memory producers are diverting factories to AI-optimized products such as HBM, limiting output of commodity DRAM and NAND used in desktops, laptops and consoles. This reinforces a hierarchy where AI servers secure first call on supply, while consumer devices absorb the residual. The result is a structural memory chip shortage for mainstream electronics: higher DRAM and NAND flash prices, tighter inventory, and more volatile lead times. Some device makers are reportedly considering shipping products with reduced memory specifications, while others face the unattractive choice between raising retail prices or accepting thinner margins to remain competitive.
AMD Braces for Lower PC Shipments Amid Rising Component Costs
Chip designer AMD is already feeling the impact of the memory squeeze on its client business. The company expects PC CPU shipments to decline in the second half of the year as higher memory and component costs weigh on system affordability. Executives acknowledge that several memory types have more than quadrupled in price, as suppliers prioritize AI-centric offerings over standard DRAM and NAND. Gartner forecasts more than a 10% drop in PC shipments in 2026, with budget systems hardest hit because vendors cannot build sub-USD 500 (approx. RM2,300) machines without sacrificing profitability. AMD still anticipates year-over-year client revenue growth, buoyed by its Ryzen portfolio and stronger corporate demand, as enterprises pull forward refresh plans before costs climb further. At the same time, the company warns that gaming revenue could fall by more than 20% in the second half due to elevated PC component costs and constrained memory availability.
Pegatron’s Off-Season Slump Highlights Consumer Electronics Weakness
Electronics manufacturing giant Pegatron offers another lens on how the memory chip shortage and shifting demand are reshaping the market. Its first-quarter 2026 profit fell more than 60% year over year, and earnings per share dropped sharply to their lowest level for the same period in nearly seven years. Revenue slid 10.4% compared with a year earlier, hurt by the traditional off-season and weak demand for consumer electronics and communications products. In contrast, information technology products, including desktop computers and servers, posted year-over-year growth, underscoring resilience in segments tied to AI infrastructure and enterprise workloads. Pegatron expects a rebound in the second quarter driven by rising demand for AI PCs and new consumer electronics projects. Even so, the company must navigate elevated PC component costs and volatile memory availability, which complicate pricing, contract negotiations and production planning for OEM customers.
What the Memory Squeeze Means for Consumers and PC Builders
For consumers and PC builders, the AI-driven memory chip shortage translates directly into higher PC component costs and scarcer inventory. As DRAM and NAND flash prices soar, system integrators and OEMs face mounting bills for memory that was far cheaper just a year ago. Many are responding by extending product refresh cycles, raising prices on laptops, desktops and gaming consoles, or trimming specifications to stay within target price brackets. Budget-conscious buyers will feel the most pain, particularly in the entry-level PC segment where sub-USD 500 (approx. RM2,300) systems are becoming harder to justify financially. Longer upgrade intervals, deferred purchases and a shift toward more premium, AI-capable devices are likely outcomes. Meanwhile, as AI infrastructure continues to capture priority supply, traditional consumer electronics will have to adapt to a world where memory is not only more expensive but also structurally constrained.